Making Corporations Accountable: AFSCME At Work on Wall Street

April 06, 2009

AFSCME has been a leader in the fight to restrain undeserved CEO pay and to make corporate boards more democratic and accountable. That’s why AFSCME, the Connecticut State Treasurer and the AFL-CIO recently wrote to AIG trustees who control the government block of 78% voting power urging them to hold the Board of Directors accountable for its poor decision making on matters of executive compensation. Those decisions were wrong and an inexcusable misuse of corporate assets. And they cost taxpayers as well.

After the public outrage over AIG using taxpayer funds to award massive bonuses to employees in the division that was responsible for its near collapse, the Wall Street Journal reported this week on AFSCME’s work to ensure that taxpayers’ money is spent effectively to jumpstart our economy.

It’s time for AIG to right its course by getting a new, more accountable board and taking measures to ensure that shareholders’ (including the taxpayers) interests come first. Public outrage over lavish pay has encouraged new proposals tying executive bonuses to performance and to have boards that are transparent and accountable to shareholders. An increasing number of companies are including provisions to give shareholders a say on executive pay, including Hewlett Packard, Occidental Petroleum, and Ameriprise Financial. AFSCME is urging Charles Schwab and JPMorgan Chase to adopt "bonus banking" provisions to require that executive bonuses be paid out only if the company maintains positive performance over time.